There's good news for real estate on the macro-economic front, with the latest figures from StatsSA indicating that GDP showed a year-on-year expansion of 0,8% in the first quarter of the year, following a similar performance in the last quarter of 2024 and marking the strongest pace of growth in a year.
And while the economy remains fragile, with key sectors like mining, manufacturing and utilities continuing to drag on performance, there are enough green shoots to suggest that the residential property market may find some momentum in the months ahead, especially in the light of the Reserve Bank's recent decision to cut interest rates by another 25 basis points, bringing the base home loan rate to its lowest level since February 2023.
Read more: Rate cut another boost for rising property market
The most encouraging signs come from the demand side of the economy, with household consumption up for the fourth consecutive quarter. The willingness of consumers to spend, especially on durable goods like vehicles, indicates a degree of confidence that often precedes or parallels movement in the residential property market.
When consumers feel more secure financially, they are more likely to consider major purchases, including homes. The rate cut adds further support by reducing the cost of borrowing, which could provide a gentle but meaningful boost to housing demand, especially in the entry-level and mid-tier segments.
At the same time, there are indications of ongoing caution among businesses, including housing developers and builders, about expansion. This is likely to translate in real estate to limited speculative or large-scale new projects, restraints on oversupply and pricing stability in most existing residential markets.
In this context, existing homeowners and sellers should see prices firming and starting to increase in the short-term, especially in well-located, lifestyle-oriented developments that cater to emerging consumer preferences for security, amenities and convenience.
